For example, the licensing negotiation between Sun and Google on which Dr. Cockburn relies so heavily. Well, turns out it really was less about licensing intellectual property than it was about a strategic partnership between Sun and Google related to Android. Hear what Mr. Van Nest, outside counsel to Google tells the court:
And then there is this little gem. When Oracle wanted to buy Sun, it made a statement to regulators that
it "always" licensed Java at de minimis rates:
Of course, these sections of the transcript focus on what Google's lawyer said, and Oracle's outside counsel, Mr. Holtzman, had some winning shots, as well, such as:
THE CLERK: Calling civil action C10-3561, Oracle America,
Inc., versus Google, Inc. Counsel, can you please state your
appearances for the record.
MR. JACOBS: Michael Jacobs, Morrison & Foerster, for
Oracle.
THE COURT: Welcome.
MR. HOLTZMAN: Steve Holtzman, Boies, Schiller &
Flexner, for Oracle.
THE COURT: Thank you.
MR. SARBORARIA: Matt Sarboraria, in-house counsel for
Oracle.
THE COURT: Thank you.
MS. DEARBORN: Meredith Dearborn, Boies, Schiller &
Flexner, for Oracle.
THE COURT: Welcome.
MR. VAN NEST: Good afternoon, Your Honor. Bob Van Nest,
Keker & Van Nest, for Google. I'm here with my partners,
Christa Anderson and Dan Purcell and Bruce Baber from King
Spaulding. And we have two Google representatives with us,
Catherine Lacavera and Renny Hwang.
THE COURT: Welcome to all of you.
(3)
All right, we are here for a hearing on the damages study.
Mr. Van Nest, it's your motion, so please proceed.
I have about 55 minutes, total, and then a 3:00 o'clock
calendar, so let's try to divide it roughly evenly.
MR. VAN NEST: Thank you, Your Honor. We appreciate very
much your time, and I'll try to be brief in using it.
With respect to the Daubert, rarely have we seen a report that
seeks so much based on so little. I'm going to concentrate on three
critical flaws that I think should prevent this report, or the
testimony that it represents, from going to the jury.
The first and most fundamental is, there is a complete failure
to link the value of these asserted patents or copyrights to the
damages analysis. Dr. Cockburn completely punts on that. He says
throughout his report that someone else is going to do that.
When he gets to the critical factor in the Georgia Pacific test,
he says, and I'll note this, it's from the Appendix C: "I
understand that other witnesses may testify," may testify, "that
the patents and copyrights are individually and jointly important
but right now there is no clear economic basis at this point for
apportioning the value of Android and the value attributable to
these patents and copyrights."
Well, that exercise is, as Your Honor knows, now
(4)
required by the Federal Circuit. And that --that requirement has
increased in the last several years with the Uniloc case and the
Lucent case and these enormous damage reports going in without any
attempt to tie the value of the patents to the technology.
Now, we know -
THE COURT: It's more than that, it's the value of the
claims asserted, not just the patents.
MR. VAN NEST: That's right.
THE COURT: I mean, a patent might have ten claims, and if
only four are asserted, you got to laser-like zero in on those
four. I agree with that.
And Mr. Jacobs, when it's your turn, you need to address that
point. It's a good point.
Go ahead.
MR. VAN NEST: Couple points about these patents. We are
still looking at 50 claims. We are still looking at seven patents,
I'll talk about that a little later. These are patents out of what
Oracle claims are 2000 patents covering Java.
Now, of the seven -
THE COURT: I didn't hear that. That is a new piece of
info. Say that again.
MR. VAN NEST: Oracle claims there are 2000 patents
covering Java.
(5)
THE COURT: Where is that in the record?
MR. VAN NEST: I'm not sure it's in the brief, Your Honor.
That's in material that they presented to us prior to the
commencement of the litigation. And nowhere did Dr. Cockburn try to
take into account the number of patents that even Oracle claims
covers Java.
THE COURT: Well, but if it's not in the record, how can I
rely on that?
In other words, you are making a potentially good point, but
what am I supposed to cite in my order?
MR. VAN NEST: I'll take a look, Your Honor. It may well
be in the record. It may well be in the record.
THE COURT: "May well be" is not the same thing as "is
be."
MR. VAN NEST: I agree with you there.
Now, these patents, seven of them, so far, there is no testimony
that any of them are significant to Java. Certainly, Dr. Cockburn
doesn't cite any. We haven't seen an expert report that indicates
that they're essential or nonessential.
Essentially, as I said, he doesn't promise that someone will say
it, he promises that someone may say it. And unless and until
someone says it, there is no basis for the damages analysis
whatsoever, and the report fails.
The second point which I think Your Honor has
(6)
already recognized is that there is a complete failure to
justify, including any Google advertising revenue whatsoever, in
the royalty base. There has been no analysis whatsoever of the
Entire Market Value Rule, as you noted in your order. The Entire
Market Value Rule requires not only that they make a linkage
between the asserted claims and the damages, but if they want the
entire value of the product, and here we are talking about not only
the value of the product, which is a handset, but then the
advertising on top of that, you have to show that those features
are the demand, they create the demand for the product, itself.
Again, absolutely no showing of that here.
Obviously, Google earns ad revenue from many different types of
products, mobile is a very small part of that. And Google earns
revenue off many different mobile products: iPhone, Rim,
BlackBerry, none of these are Android products.
Dr. Cockburn hasn't made any effort to show, let alone using
Android, but stepping back from Android, linking up the value of
these asserted claims, there is nothing in his report that gets
anywhere near that. No showing, really, of a logical basis to
believe that these tweaks, if that's what they are, in the Java
virtual machine, which is really all they are ever claimed to be,
could possibly have a relationship to what ad revenues Google, or
anyone else, might earn from the variety
(7)
of handsets that handset makers have published. So that's the
second flaw.
The third flaw, and this is really based on Concord Boat, Your
Honor, is that the report ignores undisputed market facts that we
know are out there that are cited in Dr. Leonard's declaration and
cited in our opposition that they just completely ignore.
Fact one is that they went to the federal regulators when Oracle
acquired Sun and said that the totality of our revenues from
handset makers, from handset makers annually, is a number in mid 8
figures. It may be a confidential number, so I don't want to put it
on the record, but it's a mid 8-figure number for everybody. And by
"everybody," I mean all the big boys: Nokia, Motorola, Samsung,
Rim. He completely ignores the existence of these, which arguably,
are the closest, most comparable thing to a license to an operating
system for a smart phone.
Secondly, they went ahead and represented to the regulators,
when Oracle acquired Sun, we have always licensed this technology,
Java, we have never refused to license it, and we have always
licensed it at diminimus rates, diminimus rates.
And yet, as Your Honor notes from Cockburn's opinion, he is
talking about a deal wherein Google would agree, in a hypothetical
negotiation, to share 15, 20 percent of its ad revenue on every
handset using Google. Ridiculous.
(8)
He overlooks the actual negotiations -
THE COURT: Repeat that last point again about diminimus
and --say that again. Where did that come from?
MR. VAN NEST: Yeah, that came from Oracle's
representations to the federal regulators when they acquired Sun.
And there was an investigation into whether this was
anti-competitive or not, that, hey, we have always licensed Java,
we have never refused to license Java, and we have licensed it at
diminimus rates.
And now you have Dr. Cockburn coming in here and claiming that
in a hypothetical negotiation, Google would have agreed to pay 15
to 20 percent of all of its ad revenue off every handset sold by
every carrier, not only using Android, but as I understand his
report, every other platform as well.
Now, the actual negotiations, in the actual negotiations, Sun
proposed a royalty all in for three years of a hundred million
dollars, and that was rejected by Google. That was offered,
according to Dr. Cockburn and according to the evidence -
THE COURT: Well, what difference does it make? Why does
it matter if Google rejected it? Google may have been playing
--they may have just been trying to get it on the cheap, that
doesn't mean it was reasonable to reject it.
MR. VAN NEST: No, Your Honor, Your Honor -
THE COURT: It may mean that the offerer was willing
(9)
to take a hundred million, but the rejection means nothing, does
it? What could it possibly mean?
MR. VAN NEST: Well, it doesn't mean nothing, Your Honor,
but your point is well taken; it probably means more that that's
what Sun offered, that's what Sun was willing to take. In other
words, in the hypothetical negotiation -
THE COURT: And then your side --tell me why there isn't
willful infringement here.
MR. VAN NEST: I will.
THE COURT: Because you went to get the license, you
didn't follow through, and now you got a production out there that
is in direct violation of these patents?
MR. VAN NEST: None of those.
THE COURT: That's a very hard scenario --I am going to
ask you, but I bet you've never seen that scenario before. I have
not.
MR. VAN NEST: And you won't see it here, either, Your
Honor.
THE COURT: Well, then, why isn't there willful
infringement?
MR. VAN NEST: I'll explain why.
THE COURT: All right. Leave enough time.
MR. VAN NEST: The negotiation that took place was not a
pure licensing negotiation. And that's been confirmed by all the
participants, including Mr. Schwartz, the CEO of Sun at
(10)
the time.
Google had two essential options in building Android: They could
have entered into a technology partnership with another company and
contributed resources and engineers and built Android together,
that's what they were discussing, in fact, with Sun.
They discussed that same thing, Your Honor, with several other
companies that already had virtual machines. So they went to
several companies, not just Sun, and said, do you want to build
this project with us together? We'll provide engineers and
technology, you provide engineers and technology, and we'll build
the product together and the advantage of that was, it might be a
little faster.
The other option they had was to build it on their own, build it
independently and using their own engineers, own technology and/or
licensing technology from other third parties, not --not just Sun,
because many other folks were building virtual machines.
What happened was, they couldn't come to terms with Sun --by the
way, in those negotiations, there wasn't any specific discussion of
the patents. Nobody showed them Sun patents. Nobody said, are you
infringing these patents. They didn't see these Sun patents until
Oracle showed them to them a month before -
THE COURT: Why did they need their license, then?
(11)
MR. VAN NEST: They were negotiating a technology
partnership, they were negotiating an agreement. They weren't
coming to say, we need a license to your technology, they were
coming to say, we have a product and a project we would like to
build, we would like to build it together, you guys have technology
that might be useful, we have technology that might be useful,
let's partner together and build it.
And that is what was being proposed in 2005 and 2006 in these
discussions we've been talking about. That was not acceptable,
ultimately, either to Google or to Sun, they couldn't reach term on
that. So Google went out, they built their own. They used a
clean-room environment. They didn't look at any of these Sun
patents we're talking about.
And the kicker is, Your Honor, discussions continued, there were
further discussions; Sun became more and more and more interested
in getting on the Android bandwagon.
So when Android was announced in 2007, Sun didn't throw up their
hands and say, oh, my gosh, you're infringing, Sun congratulated
Google on Android, welcomed Android to the Java community, put
Android on Sun products, asked Google how they could help
Android.
The whole point was that Android was something that Sun saw,
then, as beneficial to them, something that would spread the news
and the word about Java. They didn't come in in 2007 --
(12)
THE COURT: So you're saying that Android does not use
Java.
MR. VAN NEST: I'm saying that Android does not use Java,
that we are going to prove noninfringement, that Android uses the
Java programming language, which nobody claims is protected by
Sun.
The Java programming language, Your Honor, is the alphabet, the
language that programmers use to write source code. That is open to
everyone. And that is being used not only by Google, but by many,
many others in the Java community, and nobody's claiming that
that's infringement.
With respect to how the Dalvik virtual machine works and the
Dalvik Java libraries that are used, those are original Google
technology or licensed from third parties. Google has a license
from the Apache Software Foundation. And they have a license to use
libraries that the Apache Software Foundation created. And nobody's
contesting that they have that license.
And, Your Honor, the proof in this is that when this thing was
announced, and we just sat down with Mr. Schwartz yesterday, when
Google announced Android in '07 and when they launched it in '08,
the reaction from Sun was, welcome aboard, we want to work
together, you are another way of spreading the Java programming
language. We welcome you, we want to work with you, we want to be a
part of Android.
There was never a threat of litigation. There was
(13)
never a waiving of patents. There was never a waiving of
copyrights. All that started only after Mr. Ellison paid billion
for Sun and then turned around several months later and sued.
But at the time, the people running Sun, the people who had been
in the negotiations, the people who were in direct contact with Mr.
Rubin, the people who were talking with Google and who rejected
this technology partnership, they didn't come after Google.
THE COURT: Well, what do they say now in their
depositions?
MR. VAN NEST: Just exactly what I told you.
THE COURT: So at the time of trial, the former Sun
executives are going to come in here and say there was no
infringement?
MR. VAN NEST: They are going to come in here and say that
they negotiated for a technology partnership, they hoped to be part
of Android, it didn't work out. But that when Android was launched,
they welcomed it, they publicly applauded it. They got aboard it.
They said it can help us. They said it will help us sell our
hardware, and -
THE COURT: What did they say about infringement?
MR. VAN NEST: Their view was that Google had built the
Dalvik in a clean room, and they had a license from Apache. And Sun
said, the Apache license gives them the right to use
(14)
the Apache code, and we are not going to sue for that. And they
didn't sue for that, they recognized the legitimacy of the
third-party license that Google had. They recognized Google's right
to publish its own product. They recognized Google's right to -
THE COURT: I don't know if this is true or not, but the
allegation is made that you have hundreds of lines of code that
came straight --copyright --exactly the same code that --it
belonged to Sun.
MR. VAN NEST: The allegation is not right. There are
--there are a few lines of code that are identical to Java code.
And we are still investigating that, but it turns out that probably
came from some third-party vendor that created it in either Russia
or Eastern Europe, imported it in. We had asked for them to build a
module, and that is how it got in there.
THE COURT: I got you off track.
MR. VAN NEST: Well -
THE COURT: We only have about five more minutes, and then
I'm going to let you save 3 or 4 minutes for rebuttal. So I'll be
quiet for five minutes -
(Laughter.)
THE COURT: I know what you have in your brief, you don't
have to repeat it; I think it's important, though, that --you have
said a few things I haven't heard before, so
(15)
spend your time on those things you think you want to make sure
that I have in mind.
MR. VAN NEST: Okay.
The other two things that I want to make sure you have in mind,
Your Honor, are, one, it seems to me that the level of scrutiny
that the Court should apply to this should go up when you are
talking about a $6 billion damage report. It's not as though they
threw a $250,000 report on the table. This report is going to be
exceedingly confusing for jurors, especially if they would be
allowed, through Dr. Cockburn, to present that large a number with
this many flaws without a legal link to either the asserted claims
or to the ad revenues.
And in your job as gatekeeper, it seems to me that job is even
more critical and more important the larger the number is. And in
terms of protecting both Google and jurors from the kind of
confusion that could result from this sort of report, it's
absolutely critical that you take a hard look at it.
Now, what are we asking you to do? We are asking you to strike
this report based on all of the flaws that I've identified and any
others the Court thinks are meritorious. We are not asking you to
bar Oracle from presenting a report. They have expert report
deadlines coming up on the 29th; they can redo a report following
the principles of Uniloc, and Panduit, and setting forth the Entire
Market Value Rule.
(16)
But this report should fall, this report should be stricken, and
they should be advised that unless and until they come up with a
report that meets the requirement of Daubert, they won't have any
expert report at all.
THE COURT: Thank you.
MR. VAN NEST: Thank you.
THE COURT: I'll let you have about 4 or 5 minutes, Mr.
Jacobs -
MR. JACOBS: Your Honor, Mr. Holtzman will be -
THE COURT: Very good.
Mr. Holtzman.
MR. HOLTZMAN: Thank you, Your Honor.
I actually, especially in view of the limited time, we have a
binder for the Court I would like to hand up.
THE COURT: All right.
MR. HOLTZMAN: Hopefully some of which we will be able to
actually get to. And it covers, Your Honor, each of the aspects of
the hearing today. The Daubert issues are in the first tab, and
then the Court asked a number of questions, and the second two tabs
cover those.
I'd like to address, hopefully briefly, each of the points that
Mr. Van Nest made, which I think also will cover the Court's
questions in its previous orders. And I would like to do that, I
think, in reverse order.
I want to start first with the willfulness issue.
(17)
It's interesting that in his presentation, Mr. Van Nest focused
with regard to willfulness entirely on what Sun said, purportedly
said regarding, you know, this issue of Android and how they
reacted to it. The question with regard to willfulness, the
question under the law of willfulness, is what Google knew and
whether Google acted, despite an objectively high likelihood there
was infringement.
THE COURT: What have you found in their files? I mean, in
other words, do you have --I saw that e-mail that you referred to,
but it doesn't call out any patents. So do you have some e-mail
inside their files that says one of these seven patents were be
infringed?
MR. HOLTZMAN: We have --not as to the specific patents,
because, with all due respect, when you think about Google and what
we were the thinking at the time, it's not like they went through
each and every patent and the claim of the patent and said, oh,
this one's a problem, this one's not a problem. But, the evidence
will show clearly and convincingly that before the infringement
began Google said --and we have documents on this --Slides 67
through 70 in the binder. I don't want to discuss those documents
at great length when the public's here -24
THE COURT: You said it --listen, there is no restriction.
This is a public proceeding. And you lawyers and
(18)
the companies are not going to handcuff the public from knowing
what goes on in its Federal District Court.
This is not a wholly-owned subsidiary of Oracle Corporation. So
I'm going to have a public order. No one is going to put my order
under seal, even if I refer to your secret documents. So you can
say anything you want.
MR. HOLTZMAN: Okay, I completely agree, Your Honor. These
are their designations and -
THE COURT: Fine, you say whatever you want.
If Google has a memo in their file saying, we are about to
willfully infringe, there is no way I'm going to keep that secret
from the public or the investing public.
MR. HOLTZMAN: Okay. Well, let me -
THE COURT: So you say whatever you want to say.
MR. HOLTZMAN: Absolutely. I appreciate that, Your
Honor.
Let me summarize -
THE COURT: The same goes for Oracle.
MR. HOLTZMAN: Yep.
THE COURT: You don't want to get me started on this. You
big companies do not own the U.S. District Court. So, yes, you can
have your protective orders, but when it comes to a public hearing,
I'm not going to have to resort to Morse Code to understand what
you are trying to tell me.
MR. HOLTZMAN: Okay, Your Honor.
(19)
THE COURT: Go ahead.
MR. HOLTZMAN: Let me summarize them, in the interest of
time, and they are in the slides that we present.
Prior to the time the infringement began, Google's executives
recognized that Sun's intellectual property was, as they put it,
critical and central.
THE COURT: Where does it say that? I didn't see that
e-mail. "Critical and central"; where does it say that?
MR. HOLTZMAN: Okay, so, looking, for example, at page 67
of the binder -
THE COURT: Okay, let's look at that.
MR. HOLTZMAN: This is an excerpt from a document, not the
actual document. I'll represent, of course, that it's accurate.
THE COURT: All right, okay, in 2005, Andy Rubin -
MR. HOLTZMAN: Yes.
THE COURT: --"wrote to Larry Page, said Android building
a Java OS, and they were, quote, 'making Java central to Android.'
He proposed that Google obtain a license. My proposal, quote, 'is
that we take a license.'"
MR. HOLTZMAN: And then -
THE COURT: And your point is, your argument, anyway, is,
well, that's what they said, but they knew they needed a license,
and they didn't get it.
Did they use the word "license"? I guess they did.
(20)
MR. HOLTZMAN: They did, absolutely did, Your Honor.
Perhaps the -
THE COURT: But wait a minute, Mr. Van Nest said it was
not a license, that it was a joint venture.
MR. HOLTZMAN: Yeah, I wanted to address that because, of
course, the discussions proceeded on a broader basis. But, again,
as it relates to willfulness, the issue is what they thought they
needed, what they thought was critical, what they thought was
central, what they were willing to do, whether they were willing,
in the words of another document, to position ourselves against the
industry. That's on page 68.
Whether they are willing to make enemies along the way, that's
on page 70, okay? And they did specifically use the word "license,"
it was an integral part of those discussions.
Perhaps the most telling example of this is in a later document
-
THE COURT: Would you --I want to stick with your 67,
though.
MR. HOLTZMAN: Yep.
THE COURT: You use the word "critical," you put it in
quotes, and you say,
"Mr. Rubin stated in a presentation to Google's executives, that
a license from Sun was, quote, 'critical,' closed quote. So read to
me --but I want to hear it for
(21)
myself, read to me the wording.
MR. HOLTZMAN: The exact --I do not have that. Maybe it
can be pulled.
THE COURT: Maybe if you can pull it in time? I would like
to maybe even see the document, that would be good.
MR. HOLTZMAN: Absolutely.
THE COURT: I would like to see what the document
said.
MR. HOLTZMAN: We can, of course, submit them, Your
Honor.
THE COURT: No, no, come to court next time prepared.
MR. HOLTZMAN: Okay.
THE COURT: Go to your next point.
MR. HOLTZMAN: Yeah. I wanted to, in the interest of time
-
THE COURT: Dr. [verbatim] Dearborn is bringing forward
--all right, would you show that to the clerk and then let me see
it.
(Handing up document.)
THE COURT: This does have the word "critical," but it
doesn't have the word "license."
MR. HOLTZMAN: That page does not have the word,
"license."
THE COURT: Why does your page 67 have the word
(22)
license on it when the word license doesn't appear on your
cite?
MR. HOLTZMAN: It may be a different page of that
document, Your Honor. I would have to look at it.
THE COURT: That's not so good. I think you should be more
accurate next time.
MR. HOLTZMAN: The slide is accurate, Your Honor.
THE COURT: The word critical is accurate, but the word
license is inaccurate. Just said, why do the deal; well, the deal
could be a joint venture.
Earlier, you did have one that said license, so see if you can
find that one for me.
MR. HOLTZMAN: Okay.
Well, in the interest of time, I'm not finding it at the
moment.
THE COURT: All right.
MR. HOLTZMAN: Let me switch to another document. If you
look at page 74.
THE COURT: All right, let's look at that.
MR. HOLTZMAN: It's a later document, Mr. Lindholm, at
Google, and he states in the document.
"What we've actually been asked to do by Larry and Sergey"
--those are the cofounders of Google --"is to investigate what
technical alternatives exist to Java for Android and Chrome. We
have been over a bunch of these and
(23)
think they all suck. We conclude that we need to negotiate a
license for Java" -
THE COURT: That's a pretty good document for you.
MR. HOLTZMAN: Yes.
THE COURT: That ought to be, you know, big for you at the
trial.
MR. HOLTZMAN: Yep.
So these are the kinds of evidence we focus on I think will show
clearly and convincingly they knew they needed a license and acted
despite that fact.
Now, let me go to the Daubert arguments. Now, Mr. Van Nest
articulated three central arguments, he said. And the third, going
in reverse order, he says that the report ignores undisputed market
facts. Well, the first thing about this is that none of the things
he then said --he said three things, factually, about what Oracle
said to the regulators, about the value of Java revenue from
handset manufacturers, what Oracle said about always licensing at
diminimus rates, and then they talk about ignoring the actual
negotiations between the parties.
First of all, none of what he said is undisputed. In other
words, he has his evidence, Mr. Van Nest has the evidence that he
wants to focus on in terms of valuations or public statements. But
he ignores the fact that Professor Cockburn describes at great
length a corpus of evidence,
(24)
including some of the things they want to focus on, assesses it,
and reaches a conclusion. Daubert is not a battle of experts, it's
not about making --resolving factual disputes, and these things are
all disputed. So that is the first point.
The second point on this argument is the things that Mr. Van
Nest pointed to: Oracle's statement about its Java revenue,
Oracle's statements about its licensing practices and the actual
negotiations between the parties, they are not comparable. These
are things that under the Lucent case that Mr. Van Nest referred to
are specifically to be viewed with skepticism. You can't just take
these simple benchmarks and therefore transfer them over.
The licenses -
THE COURT: What did Lucent say that would make the actual
--let's say that Sun made an offer to license, just to make it
simple, these seven patents for $100 million, let's say that; why
wouldn't that be a pretty good comparable?
MR. HOLTZMAN: The --the key fact here --I mean Lucent,
the central teaching of Lucent, of course, is that past licenses
have to be comparable, they have to be on similar economic terms
and under similar economic conditions.
The fact that -
THE COURT: Or you have to be able to adjust for it. I
agree with that, it has to be comparable, but let's say that it
involved more than these seven patents, let's just say it
(25)
was just a hundred million for these seven patents, why wouldn't
that be comparable?
MR. HOLTZMAN: Because the conditions of those licenses,
as Professor Cockburn discusses in his report at some length,
revolve around the compatibility, the absence of fragmentation, the
compliance with Sun's, at the time, technical compatibility kit
that promoted the value of the Java platform in Sun's ancillary
products, not destroyed it, not fragmented it, not forked it.
THE COURT: How do you then respond to Mr. Van Nest, who
said as soon as this Android came out, the Sun executives, they
didn't recoil in horror and say, my God, fragmentation, this is
terrible, they applauded the product.
So why --how can you now say through a hired expert --how much
is he being paid per hour, by the way?
MR. HOLTZMAN: He is being paid --it's in his report, Your
Honor.
THE COURT: How much is it? I'm just curious.
MR. HOLTZMAN: $700 per hour.
THE COURT: Somebody being paid $700 per hour, of course
they are going to come in and --but at the time, the Sun people
said, this is great. They didn't say it was a terrible thing. They
didn't --who came up with the idea of fragmentation? That was after
Larry Ellison bought the company.
(26)
MR. HOLTZMAN: Actually, that's not the case, Your
Honor.
THE COURT: Well, then, tell me -
MR. HOLTZMAN: In fact, as Andy Rubin testified in his
deposition, Google's Andy Rubin -
THE COURT: Yes?
MR. HOLTZMAN: --in the discussions that the parties had
regarding a license or a partnership or both, Mr. Rubin commented
in his deposition that the Sun people were hypersensitive to
fragmentation. This is before the infringement began.
Now, what the factual record --what the evidence will ultimately
show about what Sun executives said at the time is what the record
will show. I would submit that that is not to be resolved at this
juncture based on a report that was submitted 70 days before the
end of discovery, before there is anything, any record developed at
all. That's simply a factual dispute.
The actual negotiations, as well as the past licenses, have to
be considered and adjusted for the fundamental differences between
them and the hypothetical license which takes the infringement as
it occurred.
THE COURT: So if -
MR. HOLTZMAN: And Professor Cockburn does that.
THE COURT: If --here's what I don't get, though:
(27)
If the e-mail from the inside --Google recognized that Sun was
hypersensitive to fragmentation, why wasn't that sensitivity
already reflected in the 100 million-dollar offer?
MR. HOLTZMAN: Because that offer, Your Honor, was an
offer for an implementation of the intellectual property that would
have promoted the value of the Java platform overall, not defeat
it.
And Professor Cockburn goes through this and specifically
addresses this issue. If you take the hundred million dollars, or
so, that Mr. Van Nest talked about, and then you add onto that the
value --and this is --this is evidenced in the contemporaneous
documents that Sun had --if you add the value that that deal in
those terms would have generated for Sun, you get to a much, much
larger number, a number over a period of a number of years that is
similar to the $2.6 billion damages number.
Because on an analyzed basis, Sun showed that under that deal,
guaranteeing compatibility, guaranteeing a lack of fragmentation,
and sharing control, Sun would have generated in just a three-year
period ramping up to almost $600 million a year in revenue. This is
what was lost, in part, by Sun, as a result of the
infringement.
THE COURT: Is there a single former Sun executive who you
have found who will come forward --who is not on the payroll, by
the way --who will come forward and say, oh,
(28)
fragmentation is terrible.
MR. HOLTZMAN: Absolutely, multiple ones.
THE COURT: Give me an example.
MR. HOLTZMAN: Fragmentation -
THE COURT: Somebody at Sun who can come and counter
--make a dent in the argument that when this product came out, Sun
embraced it warmly and did not recoil in horror at the idea of
fragmentation.
So tell me somebody who --who is the first Sun executive not on
the payroll who recoiled in horror?
MR. HOLTZMAN: Well, one of them, certainly, is Param
Singh, who is now at Oracle.
THE COURT: He is where?
MR. HOLTZMAN: At Oracle.
THE COURT: But he is on the payroll; I'm talking about
somebody who is not on the payroll or hired one of your
retainers.
MR. HOLTZMAN: No, it's an employee.
THE COURT: Somebody who maybe today works for somebody
completely different and has nothing to do with this case and has
no axe to grind, the kind of people that juries tend to
believe.
MR. HOLTZMAN: Absolutely, Your Honor.
So you are talking about former employees of Sun?
THE COURT: Former employees who were in a position
(29)
to know and would be willing to say, I've looked at this, I'm
not being paid by either side, and fragmentation is going to ruin
Java.
Who would that be?
MR. HOLTZMAN: I'm a little hesitant to call them out,
Your Honor, but, for example, one -
THE COURT: I don't care if you don't want to tell me.
Then that's your problem.
MR. HOLTZMAN: No, I appreciate that.
Rich Green, for example, now at Nokia, is somebody -
THE COURT: What's the name?
MR. HOLTZMAN: Rich Green.
THE COURT: Rich Green, all right.
What's he going to say?
MR. HOLTZMAN: I don't know if he will testify, Your
Honor. It's up to him, essentially. We can subpoena him, but we
haven't made all those decisions yet.
THE COURT: All right.
MR. HOLTZMAN: Kathleen Knopoff is another one, and she is
also a former Sun employee.
THE COURT: All right, I've taken a lot of your time, and
I want to give you some quiet time to make your points and without
me interrupting you.
MR. HOLTZMAN: No, I appreciate that.
(30)
THE COURT: Please go ahead. I want to make sure that you
have a chance to say the things that you want to make sure I
haven't read yet. I've read a lot, but I want to give you that
chance to make your main points.
MR. HOLTZMAN: I appreciate that, Your Honor. And there
are, by the way, other former Sun executives in that category.
I think I've covered the third point that Mr. Van Nest made, his
supposedly undisputed market facts.
Professor Cockburn's report discusses, and the record will show,
that when you look at these facts, his facts as well as our facts,
and you adjust for them properly, you get something that is
extremely consistent with his damages number, okay?
Now, going to his second --his second argument that the
--Professor Cockburn's report shouldn't have included, Android or
Google advertising revenue in his damages analysis, Google's
argument seems to be, and I think is, that there -that damages
should be zero in this case.
THE COURT: That's ridiculous, too. And we're not --that's
not going to happen, so you don't have to worry about that.
MR. HOLTZMAN: Okay.
So let me -
THE COURT: It's probably in the millions, I don't
(31)
know, maybe the billions, I'm not sure what it is. But zero is
ridiculous.
MR. HOLTZMAN: Yep.
THE COURT: See, you are both just asking for the moon,
and you should be more reasonable.
MR. HOLTZMAN: Yeah, but the issue on Daubert, Your Honor,
is whether the methodology -
THE COURT: Yes, that's true.
MR. HOLTZMAN: And the use of the --the way that Google
monetizes Android, which is through advertising revenues, is
consistent with the economics, and it's consistent with the law,
and consistent with the -
THE COURT: Well, you don't sell Android as a product,
right?
MR. HOLTZMAN: That's exactly right, Your Honor, but the
way they -
THE COURT: So the way you make your money on it -no, the
way Google makes the money on it is, it has a value, Android has a
value; how do we determine what that value is? Well, one way you
would do that is to look at the advertising, the benefits, the
advertising revenue that is attributable to it.
MR. HOLTZMAN: That's right.
THE COURT: Seems to me --they are totally wrong on
that.
(32)
MR. HOLTZMAN: Okay.
THE COURT: You don't have to waste your breath on that
one, but you do have to waste your breath on a few other
things.
MR. HOLTZMAN: Okay, and that's the last one I was going
to get to.
THE COURT: All right, go ahead.
MR. HOLTZMAN: There is this is argument that there is a
key failure to link the value of these patents to the damages, and
this also -
THE COURT: You don't even know what patents you are going
to assert.
MR. HOLTZMAN: Well -
THE COURT: You don't even know --you can't even tell me
now which claims you are going to assert at trial. And you want me
to just gamble that whatever you decide on is going to be the
Entire Market Value Rule?
MR. HOLTZMAN: Well, Your Honor, we have -
THE COURT: That is crazy, and you cannot get away with
that.
MR. HOLTZMAN: Okay, well, we've asserted a number of
patents -
THE COURT: You told me that --you have gone from 123
--you can't even make up your mind what is infringed. You go from
123, now you are at 50, and you are heading down to
(33)
somewhere below 25. And now you want me to say, well, maybe,
maybe we'll roll the dice and see if they can come up with some
that translate to the Entire Market Value Rule, which is under
attack in the Federal Circuit and is on its way out?
MR. HOLTZMAN: Okay -
THE COURT: Come on, I'm not going to do that.
MR. HOLTZMAN: Well, there are a lot of things in there,
actually, I disagree with.
THE COURT: Well, you get to be the judge some day -
(Laughter.)
THE COURT: --but right now I'm the gatekeeper. And that
one you are going to lose on.
MR. HOLTZMAN: I appreciate that.
I do think the Entire Market Value -
THE COURT: You didn't even put in your report on that,
you said somebody else is going to do that.
MR. HOLTZMAN: The Court asked our experts -
THE COURT: I said everything you have on damages.
MR. HOLTZMAN: Absolutely -
THE COURT: And this is part of it, and there is nothing
there.
MR. HOLTZMAN: Your Honor, of course, we are prepared to
supplement or fix, as the case may be.
(34)
THE COURT: I made a big mistake giving you this
chance.
I went to this conference, Mike Jacobs was there; I was
thinking, how can we make these cases more simple? Everyone in the
room, Judge Rader, everyone, they were talking, these damages
reports are out of control, we got to do something about it. And so
I'm thinking, okay, maybe a way to do that is to let the lawyers
submit their reports in advance, and then I can say this is good,
this is bad, that's good, you know?
Instead, I get a report that calls for 6 billion, not million,
billion dollars. You are never going to do it again. I'm never
going to let --the next time the lawyers are going to take the
--gamble everything, one shot. And if they lose it, they don't get
a report. Just like Mr. Van Nest said, if you get greedy, it goes
out the window, no more report, you just get an injunction,
maybe.
MR. HOLTZMAN: Your Honor, the Court's case management
order required, among other things, our experts to put in their
report based on assumed fact scenarios. Now, there are two parts to
the Entire Market Value Rule analysis. And by the way, this is a
copyright case, too, Your Honor.
THE COURT: There is an assumption there. There is nothing
in there but a guy who is being paid $700 an hour who comes up with
$6 billion. Come on.
(35)
MR. HOLTZMAN: That's because the issue here of what -
THE COURT: He assumed every important point.
MR. HOLTZMAN: I don't think every important point.
THE COURT: What do I do? This is not a good way to run a
railroad. Maybe I'm the one that is at fault.
You will get another chance, I'm going to give you another
chance, but it was a mistake for me to do it this way. I should
have just made you gamble on whether or not you would be too
greedy, and if you were too greedy, you would not have a damage
report, too bad for you.
MR. HOLTZMAN: No --with all due respect, Your Honor, what
we and Professor Cockburn are trying to do is comply with the
Court's order.
The Court required us to put in our entire damages report, not
our entire technical expert report, for example. The one issue here
on which he says other witnesses --and that is fact witnesses as
well as expert witnesses --may testify to is the specific extent to
which the particular patents, the particular claims, delivers
things like speed, memory, and security to Android. That's a highly
fact-intensive, a highly technical inquiry.
Now, that is something that goes to liability as well as
damages. A judgment call has to be made, Your Honor, as to whether
that has to be in and whether an economist like
(36)
Professor Cockburn can competently do that. That's a judgment
call that has to be made.
Now, he didn't omit everything, that is the one thing he did
omit, and he deferred to other witnesses.
THE COURT: He didn't even tell what the claims were. He
didn't even say what the claims were.
MR. HOLTZMAN: That's true, Your Honor, that's not his
fundamental core expertise, that goes to liability.
What he did as an economist was address the demand question, he
said once --you take an assumed fact scenario that these claims of
these patents provide speed, memory and security. He looked at the
evidence, he discussed some of the evidence and said that is
sufficient to form the basis for demand.
Now, also, there are copyrights at issue in this case. And by
the way, the test is different under copyright. If we show --they
acknowledge in their reply brief a causal nexus, which doesn't mean
forms the basis for demand, it means under the law of the Ninth
Circuit that the copyrights materially enhance the value of the
infringing product. Then you get direct and indirect profits as
damages. And that can be in the form of reasonable royalty, or it
can be in the form of the infringer's profits.
And in terms of the infringer's profits, which in their words
are the lion's share of the damages in this case,
(37)
the damages analysis, it is Google's burden. It is not our
expert's burden, it is not Oracle's burden to show under the
Copyright Statute that the profits attributable to other -that some
of the profits are attributable to other elements of the infringing
product. And that is an independent validation and justification of
the approach that Professor Cockburn has here, both the reasonable
royalty and the infringer's profits.
THE COURT: All right, thank you.
Mr. Van Nest, I have a question for you: When was that date of
first infringement?
MR. VAN NEST: Well, if --if -
THE COURT: Ah, ah, ah -
MR. VAN NEST: I would have to look back, Your Honor. The
device was announced in '07. It was tested -
THE COURT: No, no, wouldn't the laboratory work -
MR. VAN NEST: Yes.
THE COURT: I will say this: It is not the date of first
sale.
MR. VAN NEST: No.
THE COURT: That is wrong, that is wrong. Oracle is wrong
on that. That only applies when it's being shipped into the
country.
Somebody was using it in the lab or experimenting with it. So
someplace you got to tell me, what was the date of
(38)
first infringement?
MR. VAN NEST: It was in 2006, is when they used the
product in the lab. 2007 is when they announced a software
development kit to the public, which would --included the -
THE COURT: When did Oracle buy Sun?
MR. VAN NEST: 2010.
So if I can tie this together a little bit -
THE COURT: Go ahead. You have five minutes. Yes.
MR. VAN NEST: --and respond?
I want to talk first about a question you asked Mr. Holtzman
twice, and he didn't answer.
Where were the patents? Where is the memo about the patents? The
answer is, the patents are not in Google's files. No one was shown
these patents during the negotiations. Nobody --there is no memo
out there that says, oh, my gosh, we are infringing these Sun
patents, there is none of that.
The first time anybody saw these patents is when the Ellison
crew came in about a month before this lawsuit was filed and said,
here are some Java patents, we think you are infringing, pay
up.
So it is undisputed that there is nothing back in the files and
nothing back in the records that anyone's turned up at this point.
And discovery is almost over.
THE COURT: What do you say to this memo right here? I'm
going to read it out loud, this is from Tim Lindholm:
(39)
"I, Andy" --Andy; is he the president now? What is his job
now?
MR. VAN NEST: It's Andy Rubin, Your Honor.
THE COURT: Yes. What's his job now?
MR. VAN NEST: Andy Rubin is still the head of Android at
Google.
THE COURT: Okay, so he'll be on the hot seat at trial and
have to explain this e-mail, which says in the second
paragraph:
"What we have actually been asked to do by Larry and Sergey is
to investigate what technical alternatives exist to Java for
Android and Chrome."
MR. VAN NEST: Two points, Your Honor -
THE COURT: Wait, wait, wait.
"We've been over a bunch of these and think they all suck"
--that's a good technical term.
"We conclude that we need to negotiate a license for Java under
the terms we need."
Okay, "license for Java"; well, that's --okay, I agree with you,
it doesn't say patents, but don't you think a good lawyer will
convince the jury that that meant a license for patents and maybe
for copyright?
But, I mean, how are you going to get around that?
MR. VAN NEST: Your Honor -
THE COURT: They --you know what they used to say
(40)
about Joe Alioto? He needed --you know, in a big case like this,
he would come in, he only needed two documents: He need a document
like this, the one I just read, and the Magna Carta, and he won
every case.
And you are going to be on the losing end of this document, and
with Andy Rubin on the stand.
MR. VAN NEST: Judge Alsup, there is -
THE COURT: You think about that.
And I want to say this: If willful infringement is found, there
are profound implications for a permanent injunction. So you better
think about that, and your client ought to think about that.
I'm not saying there was willful, but that is a serious factor
when you are talking about an injunction. If somebody has willfully
infringed, they had better be thinking about an injunction.
MR. VAN NEST: Your Honor -
THE COURT: So you --so how are you going to get around
this?
MR. VAN NEST: Number --two points, two points.
Number one, this is August 2010, this is 2010. This is after the
Ellison crew has come in, about a month before the lawsuit starts,
and says, here's the patents, we think you're infringing, you
should take a license.
So this isn't back in the day when they are working
(41)
on the project, this is not in '05, '06, '07, '08, this is
2010. I'm not sure this is even going to come into evidence.
These are negotiations by the parties -
THE COURT: Why were they looking for an alternative to
Java, then?
MR. VAN NEST: Because if Oracle comes in and says, okay,
you are going to have to spend all this money on a lawsuit, and we
are going to seek billions of dollars, the question from the CEO
is, is there any other way we can do this and avoid it,
altogether?
Now, let me point out a couple of things. The alternatives we're
talking about here might be simply alternative languages. And
again, Mr. Holtzman didn't dispute that the Java programming
language is open to everybody, open to everybody. You didn't hear
him dispute that.
So what is happening in this e-mail -
THE COURT: Well, explain that part to me. Because you
keep saying that, but weren't there --wasn't it open to everyone,
so long as there is no fragmentation, or so long as you use their
kit? Is it really open to everyone, or were there conditions?
MR. VAN NEST: The programming language was open to
everyone. You could use their virtual machine, if you didn't
fragment. However, just yesterday, the boss --you asked about third
parties that have no axe to grind? The former CEO of
(42)
Sun, the guy making the decisions, said yesterday in deposition
under oath, Android is not a fragmentation of Java, Android is a
competitive alternative to Java. I regarded Android as a positive
thing for Sun. I wish it had been more positive, he said, I wish it
had been even more positive, they would have paid me a lot of
money, but even as it was, it was a positive, and it is not
fragmentation.
THE COURT: Okay, wait, wait, that's an important
point.
Who said that?
MR. VAN NEST: Jonathan Schwartz, who was the CEO and
president of Sun at the time, in 2007 and 2008.
THE COURT: Where is he now?
MR. VAN NEST: He's doing his own thing. He left Sun when
Oracle came in and acquired because, as he put it yesterday, I
thought they already had a CEO. So he is doing his own independent
development. And he testified under subpoena yesterday and said
Java is not --excuse me, Android is not fragmentation.
But I want to come back to my -
THE COURT: I --you said something --I'm going to let you
come back, but you also said something I want to make sure I grasp.
You said that the Java software is open and unconditional, and it's
only the virtual machine that has this kit; is that right? Did I
--
(43)
MR. VAN NEST: The Java --what I said was --close. It's
the Java programming language; the language that you write programs
in is open to everyone. And not even Oracle disputes that.
THE COURT: Okay, wait a minute: Java program language
open, unconditional.
MR. VAN NEST: Right.
THE COURT: And what is it, then, that is conditional?
MR. VAN NEST: What's conditional is, if you want to use
Sun --and many other companies developed a virtual machine and a
series of code libraries, so let's call them the Java libraries and
the Java virtual machine. Anybody can take a license to that, too.
Anybody can take a license to that for free, nobody has to pay a
penny for any of that.
But as to that, there are conditions. The condition is, if you
take that license, which again, Your Honor, is open free of charge,
if you add your own code to it, you have to make that public.
THE COURT: All right, I got that distinction.
MR. VAN NEST: Right.
THE COURT: So two parts: Does your Android use the Java
virtual machine?
MR. VAN NEST: No.
THE COURT: All right.
(44)
MR. VAN NEST: It uses the Dalvik virtual machine.
THE COURT: All right, so let's assume that's right for
the moment.
Does it use the code libraries?
MR. VAN NEST: It uses code libraries that are licensed
from another party, Apache Software Foundation. It does not use the
Java libraries, it uses -
THE COURT: Well, then, what part of Java do you use that
you would need a license for?
MR. VAN NEST: None.
THE COURT: Then why did he write this memo?
MR. VAN NEST: Well, what they're saying is --and again,
this memo you are looking at is two weeks before the lawsuit
starts: An alternative for us is take a license. That's an
alternative, take a license to the whole thing, take a license to
the code libraries and the virtual machine.
But what they have, and the reason Sun never sued them, was that
when they published Android, when they announced it in '07 and
launched the product in '08, they had a license from Apache to use
the libraries, that's not in dispute.
They had developed their own Dalvik virtual machine, which now
Oracle says infringes, but at the time, the position of Sun was,
welcome to Java, welcome to the community, we want to work with
you, I don't think you are a fragmentation, you are a competitive
alternative. So that is from the number one,
(45)
that's the boss, that's the CEO that was running the company
-
THE COURT: What is that person's name?
MR. VAN NEST: Jonathan Schwartz.
THE COURT: Is he the one you deposed yesterday?
MR. VAN NEST: Yes, he is, right, deposed under subpoena
yesterday here in town.
THE COURT: Hmm.
MR. VAN NEST: So I want to go back to the -
THE COURT: You got two minutes.
MR. VAN NEST: Two minutes.
Couple of other key points. One, they simply can't get over the
hump on the Entire Market Value Rule. They made no effort to link
the asserted claims to any damages. They can talk about Java all
day, they can talk about Android all day, but until they start
talking about the claims they are asserting, even all 50 of them at
this point, they don't have a report that passes Daubert under
Uniloc or under the Microsoft Lucent case.
The other point I want to make is, he said that the facts I gave
you were all disputed, but then he didn't dispute any. In our brief
at page 5, we recite all the statements that I cited to you, Your
Honor, that Sun made and Oracle made to the SEC when they got
approval for this deal.
Number one: We are not aware of any instances where we have
refused to license the technology.
(46)
Number 2: In licensing the entire system, not just seven
patents, the entire system in 2008, Sun charged a diminimus
percentage of software revenues, diminimus.
Third statement: They said a projection for fiscal year 2011
shows that with respect to all our significant handset licenses,
all of them, Nokia, Samsung, LG, Motorola, they are going to
generate a total of less than $70 million. That's everybody, not
just Google, not just Android, that is the whole handset
community.
So he said they were disputed, they are not disputed. They were
in our brief. They haven't disputed them at all.
So the other point that I want to make is that if the big issue
here is fragmentation, and you kept asking, who is going to come
in, who is going to come in, who is going to come in: The guy in
charge of this operation at Sun believed in 2007 and 2008 and 2009
and 2010 and yesterday that Android is not a fragmentation, Android
is practicing using the Java programming language with a proper
license from Apache for the libraries and its own Dalvik virtual
machine.
And that is why in his view it was a good thing, not a bad thing
for Sun, and why he made the decision in 2007 and 2008 not to
assert any patents they had, because this was a good thing, not a
fragmentation.
THE COURT: Which --the other side contends that
(47)
there is fragmentation; does Oracle contend that the Dalvik
virtual machine is fragmentation?
MR. VAN NEST: They contend that Android is fragmentation.
They say that the Android system, because it's not completely
compatible with Java, is fragmentation. That's what they say, they
say that it's fragmentation. I say it's --it uses Java programming
language, and it uses technology built by Google or licensed
properly from third parties; therefore, it doesn't infringe. So our
position is going to be, and will be, there is no infringement,
there's no willful infringement. There is still nothing in the
record that shows Your Honor that at the time Google was developing
Android, at the time they announced Android, or in 2008 when they
launched Android, anybody had shown them these Sun patents or
anybody was aware of these Sun patents or anybody inside Google
thought they were infringing. It's a little hard to imagine that
when you announce your product, and the guy at Sun says publicly on
a blog, at a conference, and in countless interviews --it's not
just what he says now, he said it in interviews, he said it on
blogs, he said it at conferences, he said it to anybody that would
listen: We welcome Google and we welcome Android to the Java
community. Android is a pair of rockets strapped to Java. It is a
set of rockets that is going to take our Java community even
higher. It is 180 degrees --
(48)
THE COURT: Is that your term or his term?
MR. VAN NEST: That's his term.
THE COURT: Pair of rockets; kind of like the Space
Shuttle.
MR. VAN NEST: Kind of like the Space Shuttle.
THE COURT: You know, you could have --at the trial, you
can have the -
(Laughter.)
THE COURT: --Space Shuttle going off with the two
rockets, that would be a good graphic.
I need to ask the other side a question, if you don't mind.
Assume for the sake of argument --I know you contend that this
did not occur, but I would like to know what you would say in this
event: Let's say someone like Google, but not Google, had used just
the Java program language and nothing more; would that be a
violation of any of your rights?
MR. HOLTZMAN: It would not, Your Honor, but -
THE COURT: All right.
MR. HOLTZMAN: But the fundamental point is -
THE COURT: Wait, wait, wait.
MR. HOLTZMAN: Okay.
THE COURT: So my next --if somebody came up with their
own virtual machine, would that be a violation of Java?
MR. HOLTZMAN: It might or it might not. In this
(49)
case, it is.
THE COURT: Let's say that they used the Java programming
language, which you say is not a violation, and they come up with
their own independent virtual machine that is different from the
virtual machine that Java has, so I guess, theoretically, a virtual
machine, even if you independently developed it, might happen to
infringe somebody's patent: Is that your theory, that they went
into the clean room and just happened to solve the problem the same
way as your patent?
MR. JACOBS: Can I cover this, Your Honor?
THE COURT: Yes, of course.
MR. JACOBS: No, it's more than that, Your Honor.
THE COURT: Go ahead.
MR. JACOBS: It started out with Java, it was Java through
and through. And then they decided to do some renaming, and they
decided to add another layer. And so the basic architecture was
retained. It was retained with -
THE COURT: But you admit that the Java programming
language is open to anybody.
MR. JACOBS: Yes. You and I can program in Java, and we
are not infringing anybody's -
THE COURT: But so could Google.
MR. JACOBS: But they didn't stay in just programming in
Java, Your Honor, they adopted the entire architecture.
(50)
So actually, and in Android, for example, if I go out and I
write an Android application, I compile it in a Java compiler, I
output Java byte code at the next level down. And they stuck on
another layer and do a translation into what they call dex code.
And then they have a virtual machine for an Android's world: Write
once/run anywhere, and by copying that architecture, our position
is they -8
THE COURT: Wait, wait. Is the patent on the
architecture?
MR. JACOBS: There are patents --no. There are patents on
the patented technologies. Our testimony will show, the Google
documents that we will adduce will show, that once they went down
that path, in order to get satisfactory performance, in order to
get satisfactory memory usage, in order to provide satisfactory
security options to the Android community, they had to adopt these
technologies. That will be our position. That will be our evidence.
That will be our expert's testimony. And that will come in on the
29th, in part, and then we will have Google witnesses on the stand
at trial. And we will ask them, why did you adopt this technique?
And we will hold them to their public announcement that says, we
adopted this technique in order to achieve satisfactory
performance. That is what will happen at trial. And that is why our
view is, on the fundamental
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factual questions that underpin our Entire Market Value Rule,
we'll make our showing.
THE COURT: All right, time has run out. It's a very
interesting problem.
I'm going to get an order out soon, so that's the best I can say
to you. And thank you for your hard work on this. A lot of brains
--a lot of talent out there, is what I mean to say.
Thank you.
MR. JACOBS: Thank you, Your Honor.
MR. VAN NEST: Your Honor?
THE COURT: Yes?
MR. VAN NEST: You asked us for a status report on -
THE COURT: I did. I read your information on that.
MR. VAN NEST: Do you need any further comment?
THE COURT: I may --I have some thoughts in mind. And it
was very useful to read your report, but I don't need to take up
your time.
MR. VAN NEST: Thank you.
THE COURT: But I may have a supplement on that point.
Thank you.
MR. VAN NEST: Appreciate it.
MR. JACOBS: Thank you, Your Honor.
(Proceedings adjourned at 3:10 p.m.)
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